Empty Barrels Purchase

[Deepak Sarathy]

We are purchasing Empty barrels from a Company It has been clarified from Central Excise notification no 721/37/2003-CX dated 06/06/2003 that "Selling of Empty Packing materials are Non-Excisable" Mean while in 2008 a new Explanation has been Inserted under sec2(D) Which states "Products that are deemed Markatable" that arise in due coarse of Manufacturing Which is argued by the Company that Empty barrels are Exciseable and the referred notification is Silent Kindly provide us a case law after 2008 regarding the empty barrel issue (We have referred the Gulf oil case that the Judgement is Only provided on 2008 not the case) Please anyone clarify us with a proof or case law Kindly help

[YAGAY and SUN]

Dear Deepak,

Please refer West Coast Industrial Gases 2003 (155) ELT 11 (S.C). It is a settled legal position that duty is not leviable on drums/barrels/containers cleared form the factory as decided by the Supreme Court. There are a plethora of decisions in this support before the said judgment of Supreme Court also. Hence, in our opinion, no reason to demand any excise duty on drums/barrels/containers cleared from the factory by the assessee.

Further, in 2008, there was change in the definition of goods that even goods (waste) etc. fetch some money they will deemed as marketable.

For determining the liability of C.E., two components are required:-

1. Goods should be manufactured
2. Goods should be marketable

In this matter goods are not manufactured by the assesse, therefore, no C.E. duty would be payable even after the change in the definition of goods.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Deepak Sarathy]

Sir,

Thanks for your reply The same law case is referred by us but still the company is not satisfied with the explanation and arguing that Empty barrels are Excisable is there any case law after 2008 for clarifying the subject.Awaiting for your reply kindly help Thanks

[YAGAY and SUN]

Dear Deepak,

Sorry, we could not find any relevant judgment on this matter after the material period of year 2008. We will keep you inform, in case, if there is any new development occurs in this matter.

Further, you may also seek help/clarification of the Central Excise Department or of Tax Research Unit by submitting an application on this aspect.

Regards,

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Deepak Sarathy]

It has been notified by the RTI bench vide the order letter No F.No.267/38/2014/CX.8 dated 08/10/2014 that the circular number 721/37/2003-CX dated 06/06/2003 is still in force any one required the order copy can place me a request to my email [email protected]

[YAGAY and SUN]

Dear Deepak,

Thanks for sharing of information. We request you, please share with us the copy of the order on following e-mail id:

yagaysun@india.com

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Excise liability on empty barrels negated where goods are not manufactured and therefore not marketable.
Issue: whether empty barrels purchased from another entity are excisable after a 2008 Explanation deeming certain goods marketable. Respondents rely on Supreme Court precedent exempting drums/barrels cleared from factory and apply the two-component excise test: goods must be manufactured and marketable. Because the assessee does not manufacture the barrels, the manufacture requirement is unmet and excise duty is not payable; no post-2008 judgment on point was located and the 2003 departmental circular remains in force.